I've had a goal for the past 5 years or so to hit $1M in my portfolio and have the house completely paid off by the time I hit 40. I'm 33 now. I started tracking my assets and progress 5 years ago. At the current pace I should hit it early, so my new stretch goal is to reach it by the time my wife turns 40 (she just turned 37).

Goal for end of 2017 (I will be 34, wife 38)
•portfolio $550k
•mortgage 63% paid off

Goal for end of 2018 (I will be 35, wife 39)
•portfolio $700k
•mortgage 78% paid off

Goal for end of 2019 (I will be 36, wife 40)
•portfolio $875k
•mortgage paid off

That would have me hitting both goals in the year she turns 40. This isn't the type of goal I would talk to anyone about in "real life" so I'm posting here for some reason. None of this was given to me or inherited.

Of course anything can happen with the market, and life can definitely throw a wrench into plans. We have two kids: 9 months old and 3 years old. My wife has been home with the kids and that will likely stay that way for the next couple years, making it a bit more challenging of a goal but still attainable.

How much of your portfolio growth has been due to new contributions and how much due to value appreciation - I ask because you had fairly steady growth from a dollar perspective the first few years with much larger growth last year. If that growth last year was due to increasing savings then that is great and (probably) sustainable - on the other hand if that was due to the run-up in equities then you should assume that level of return will persist in your forward projections.

Good luck! It's nice to have goals. Also you have undertaken this work during a pretty powerful run up in equities so don't get discouraged if in a few years your portfolio hasn't moved much or is even worth less than it is today. Mileposts are nice but sometimes it's also helpful to focus on the process and not entirely on the outcome.

avalpert wrote:How much of your portfolio growth has been due to new contributions and how much due to value appreciation - I ask because you had fairly steady growth from a dollar perspective the first few years with much larger growth last year. If that growth last year was due to increasing savings then that is great and (probably) sustainable - on the other hand if that was due to the run-up in equities then you should assume that level of return will persist in your forward projections.

Income was highest it's ever been last year so it was mostly contributions. This year and for the next three years I have some RSUs vesting so if *should* allow for similar earnings as 2016. I say *should* because about 60% of my on target earnings are variable and 40% salary (not including RSUs) so I need to produce revenue on my own to get to where I need to be each year.

I started to really seriously focus on investing around the beginning of 1995. It went well for a while. I didn't get involved in the TMT bubble. But that stretch from around 2001-2002 until just about five years ago was a slow difficult slog. Hopefully you'll (we'll) see smoother sailing. Good luck.

*This exercise reminds me I need to rebalance. Need to consolidate my 401k, shift more to bonds there to make way for the equity investments I've recently made and ones I’m making in the next ~6 months.

Contributions

New annual Contributions
$18,000 his 401k (plus ~$10,000 employer match)
$5,500 his (backdoor) Roth IRA
$5,500 her (backdoor) Roth IRA (just realized she may not earn anything this year, may have to fix this)
$30,000 RSUs vesting per year (end up converting ~$18k to Taxable Vanguard Stock after taxes)
$25,000 ESPP (converting to Taxable Vanguard Total Stock)
$10,000 to Kids 529s
Another ~$20,000 to Taxable (vary by year)
~$20,000 toward Additional Mortgage Principle (vary by year)

Awesome to see this from another 33yr old! My wife and I have similar goals, paid off house and $1M invested by 40. We are 33/32. We aren't as far along as you but my wife has been in school forever and will graduate at the end of this year.

Nice job getting your income up, at our age I believe that is the hardest part. Once you are used to saving most of your paychecks that becomes 2nd nature.

Some of my friends have made fun on me for not spending money on silly things like video games but when I explain I hope to retire at 45 the mocking stops and it becomes "woah how can you even think of doing that?".

Nice job! I'm also in Tech Sales, wife & I are both 39. We paid our house off by mid 30s and our portfolio is around 1.2M. We've learned to live off my base and invest the commissions & bonus checks. It's crazy how fast things can grow once you get near the 7 figure mark. Stay away from the fancy cars & other material items that this profession can make you feel like you need to buy.

DoubleDraw wrote:Awesome to see this from another 33yr old! My wife and I have similar goals, paid off house and $1M invested by 40. We are 33/32. We aren't as far along as you but my wife has been in school forever and will graduate at the end of this year.

Wow, wife and I have the exact same goals. We are 35(me), 30 (her); currently ~$400k in retirement and about halfway through the mortgage. We as well were in school forever (I was until age 32), she is still right now (while concurrently working full-time). Divorces didn't help either; at age 30 I basically had to start over and when I met her (at 26) she had a negative net worth thanks to a drug addict ex. We're just getting ramped up in our careers, our household income has tripled in the last 3yrs, so we feel pretty good about hitting the marks.

I feel these are good goals to have for high income individuals. I had similar goals. Hit $1M before turning 40, but still had 50% mortgage to pay. So my goal attainment was about opposite of the OP. My stretch goal is now mortgage gone by 45, retire by 50.

This has been a great thread for me. I'm in a very similar situation as you---tech sales, stay at home wife, 2 year old and 9 month old. I have been looking for some sort of goal to latch on to and focus our resources around. Your $1 million in investments and paid off house is an awesome start.

Just_For_Jenna wrote:
Tech Sales
Salary $110k
Variable $160k if on target, could be more, could be less (so far I've always exceeded goals)
Total $270k+ (last year made $300k)

I was also in Tech sales on a similar plan. Now I do sales consulting with a higher base and a $270k target that is virtually guaranteed. I have one simple rule for being in this sort of job. Live within your base salary. Always. Never allow your budget to get past your (base - 401k - taxes).

My wife and I lived in NJ, Hoboken, at your age. We decided to move to Charleston, SC for a better quality of life, better schools, and lower COL. One thing you may want to consider is moving out of NJ to a lower cost of living area. In our profession you can keep your income, improve the quality of your life, and drastically lower your "i won the game" number. In our case, we were looking at $4m-$5m inflation adjusted nest egg to retire in NJ. Here, its $2.5m - $3m. That's HUGE!!! That lower requirement has enabled my wife to pursue a photography career, instead of burning out as a realtor, and for me to move to a no stress / limited travel position @ $270k instead of grinding in sales management @$350k. Incredibly worth it. We should be on target to "retire" at 50 - which really just means the ability to walk away - but I like what I do and if I can keep this type of strategic role going forward I sure wouldnt mind going to 55 or even 60 before walking away.

I've got the same goal. No debt (mortgage and student loans) by 40 and 1M in investable assets. Currently 34(Him) and 35(Her) with a 3yo and 1yo. My my projection spreadsheet shows me coming up around 200K short at this point but that gap has been closing every year.

Sadly, I'm significantly off track. My current projections show that I will not make it to the two comma club by 40 and I will still have my modest mortgage (though I'm in no rush to pay off a 2.875% mortgage). Hopefully circumstances can change in the next year or two as life expenses went up drastically the last two years without any change in income.

This is a cool thread but I'd suggest that $1mm portfolio is less relevant than one might think. As we all know, it's not about the dollar value, but instead one's spending rate in relation to portfolio size.

If you have expenses of $40k and get to this $1mm portfolio and no mortgage then you are financially independent (assuming 4% safe withdrawal).

If you have expenses of $120k and get to this $1mm portfolio and no mortgage then you are just 1/3 of the way there...

Nice progress so far! Also, as a fellow 33 year old I like your goals. Mine are similar. We are at a $900K portfolio level now with $345K left on the mortgage, but by the time I'm 40 I hope/plan to have no mortgage and well over $1M in invested assets. Of course a lot could change if we have kids or move to a more expensive house. Especially if one of us (aka me) stays home with said hypothetical children. But I like the saying that if you aim for the moon, even if you miss you'll land among the stars (which is not accurate from physics standpoint, but a nice sentiment anyway).

Way ahead of the game. Keep doing what you are doing.
As the saying goes "Youth is wasted on the young." Not in this wonderful forum mind you.
Many happy decades of compound indexing without the tyranny of high expenses.

Amazing to see so many with similar goals. We are currently 30 (Him) and 31 (Her) with a 3yo and 1yo. Our current portfolio is currently just past the 650k mark but we have no mortgage. We plan to use part of our portfolio to purchase our first home either all in cash or with 50% down and set aside the rest for payments. We are on track now to reach $1M in another 4yrs or so at our current rate but we know that will depend on a lot of factors and of course if we buy a house the time will probably be about the same as you. Wish everyone the best at achieving their aims!

Great thread! My wife and I put that same goal together when we got married 10 years ago. I'm now 39 and she is 36. House paid off last year and $900k portfolio. We are on track!

Similar situation, I'm in sales and we have always strived to live on my base salary. All those commission checks can really add up if you hold on to them! Congrats to all those trying to accomplish the same. As stated, even if you come up a little short, it's a heck of a start. Cheers!

Can I ask why you have this as a goal? I'm curious because I had a similar goal and now that we've reached it, I find myself just upping the numbers. Also, something about having a lot of money tied up in retirement funds for me seems sort of anti-climatic. I don't mean to be a downer, you're doing great, I'm just struggling with the "why" myself...

Leemiller wrote:Can I ask why you have this as a goal? I'm curious because I had a similar goal and now that we've reached it, I find myself just upping the numbers. Also, something about having a lot of money tied up in retirement funds for me seems sort of anti-climatic. I don't mean to be a downer, you're doing great, I'm just struggling with the "why" myself...

I'm in sales so everything is goal driven. Every month, every quarter, every year. I do the same thing with upping my goals as I hit them, professionally and personally. But they're nice even number milestones - 40 years old, $1,000,000 portfolio and $0.00 mortgage.

bmh33 wrote:Great thread! My wife and I put that same goal together when we got married 10 years ago. I'm now 39 and she is 36. House paid off last year and $900k portfolio. We are on track!

Similar situation, I'm in sales and we have always strived to live on my base salary. All those commission checks can really add up if you hold on to them! Congrats to all those trying to accomplish the same. As stated, even if you come up a little short, it's a heck of a start. Cheers!

We also live off my base salary, which is why we are able to add so much to the portfolio, mortgage, etc. I've been fearful of "lifestyle creep" since I was making less than a third of what I do now. The only "splurges" really are vacations, which I think are extremely important.

Leemiller wrote:Can I ask why you have this as a goal? I'm curious because I had a similar goal and now that we've reached it, I find myself just upping the numbers. Also, something about having a lot of money tied up in retirement funds for me seems sort of anti-climatic. I don't mean to be a downer, you're doing great, I'm just struggling with the "why" myself...

Agree, and this was the point of my earlier comment. The "number" isn't that important. It's all about portfolio size relative to expenses. The milestone of $1mm is huge if you only need $40k/year to live on because then using the 4% rule you are effectively financially independent. If you have annual expenses of $80k then you are only half way there...

If you don't know your spending rate/needs then you will just keep upping the portfolio size you think you need...

Agree it is a little disheartening to have such a big amount of funds tied up in retirement accounts when you are young (though it's a high quality problem). Look up rule 72t, you can get at the funds if you really need to in a longer term lay off or early retirement situation.

I'm in a similar boat but refinanced my mortgage at a good time and have a 2.5% rate. I think you can already meet or beat that a few different ways so I am not planning additional paydown of the loan. I've seen threads about the psychological benefit of being debt free even if it isn't totally economically rational. Do what works for you and cheers to having this problem in the first place!

Great thread. Wife and I are in similar boat - 30 and 31, dual relatively high income and expecting our first in May. I'm also in HC Tech sales. Would love to connect with other likeminded sales folks which seem to be very common in this thread! I came from a healthcare RCM sales position in which I was paid residually every month for an extended period and am now moving toward living off only base and banking future commissions/bonus. Quite the adjustment, but overall better in the long-run.

jkmccloud wrote:Great thread. Wife and I are in similar boat - 30 and 31, dual relatively high income and expecting our first in May. I'm also in HC Tech sales. Would love to connect with other likeminded sales folks which seem to be very common in this thread! I came from a healthcare RCM sales position in which I was paid residually every month for an extended period and am now moving toward living off only base and banking future commissions/bonus. Quite the adjustment, but overall better in the long-run.

It really helps. I have always done this. We avoided lifestyle creep and eliminated all debt. Now I can max my 401K, put $1k per month into a 529, and $1k per month into brokerage, and cover all expenses from base salary. Its great!

Similar goals to mine, though you're way ahead of me. 400k in investments (not including HSAs) and a $480k mortgage at 2.65%, only one income, early 30s. No kids yet, but we're "in the process," so hoping that changes. $1M/no mortgage is definitely a real, real stretch and it would take pretty impressive financial returns and no small amount of luck for it to happen, but it's in the realm of possibility.

Tabaxus wrote:Similar goals to mine, though you're way ahead of me. 400k in investments (not including HSAs) and a $480k mortgage at 2.65%, only one income, early 30s. No kids yet, but we're "in the process," so hoping that changes. $1M/no mortgage is definitely a real, real stretch and it would take pretty impressive financial returns and no small amount of luck for it to happen, but it's in the realm of possibility.

You are pretty much where I am and at the same age. Up investments about 100k, subtract 330k from mortgage, increase interest to 2.875%. Hopefully we can also reach that milestone, even with kid(s)! Good luck!

avalpert wrote:... If that growth last year was due to increasing savings then that is great and (probably) sustainable - on the other hand if that was due to the run-up in equities then you should assume that level of return will persist in your forward projections.

I made a somewhat similar goal when I was in my late 20s but a little lower threshold. Just wanted a NW of $1 million by 40. When I started I remember our NW being around 80 or 90k. That was a little over 5 years ago. I will turn 35 in a few months and I think were are somewhere around $400k NW. My trusty spreadsheet says we will hit that around early 40s. So looks like we will be close but not quite hit it. Still better than having no goal at all.

But I don't have a realistic path to 300k anytime soon. I just had to take a pay cut from 110k to 100k. Also had 3 kids in the past 5 years. Medical bills for the twins in NICU were ridiculous.

MoonOrb wrote:Good luck! It's nice to have goals. Also you have undertaken this work during a pretty powerful run up in equities so don't get discouraged if in a few years your portfolio hasn't moved much or is even worth less than it is today. Mileposts are nice but sometimes it's also helpful to focus on the process and not entirely on the outcome.

You're doing awesome and I hope you make it!

This. You have not experienced the big down turns many here have seen since 1987. Enjpy the ride, your job and your life. Your balances will not show a straight line progrssion.

MoonOrb wrote:Good luck! It's nice to have goals. Also you have undertaken this work during a pretty powerful run up in equities so don't get discouraged if in a few years your portfolio hasn't moved much or is even worth less than it is today. Mileposts are nice but sometimes it's also helpful to focus on the process and not entirely on the outcome.

You're doing awesome and I hope you make it!

This. You have not experienced the big down turns many here have seen since 1987. Enjpy the ride, your job and your life. Your balances will not show a straight line progrssion.

Understood. I know there will be downturns in this he economy over the next 30-50 years. Staying the course with the plan will get me through those periods. This goal isn't the only thing on my mind. I'm enjoying my family. I like what I do for work. 2 week beach vacation coming up in 12 days....

I do think it is important to get off to a nice start in my late 20s/early 30s, and am proud of that so far. More time in the market is a good thing.

This is a very motivating thread, can people in tech sales tell me how do you get into that kinda job? I have had a late start in my career and right now looks like the only way to have that kinda portfolio is by having a high paying job, which will allow you to have a substantial savings each year.

I'm reading through this thread for the first time, and I am also very motivated by what I'm seeing.

I'm 33 (wife 33), we have a 2.5 yr old and #2 on the way any day now.
We also live in NJ, and currently have a NW over $1M (including home equity). My first goal, is to hit $1M NW WITHOUT home equity.
After reading this thread, I can say I have similar goals to the OP.

My mortgage is a bear... $750k outstanding, but my taxable, IRA's/401K all add up to $1.5M or so.

I don't think I'll get my mortgage to zero by the time I'm 40, but would love to be in a position to have NW of $2M (including home equity).

My wife is currently a SAHM, but I'm hopeful when the kids are a bit older she can reenter the workforce in some capacity. She was a teacher before our 1st.

tin369 wrote:This is a very motivating thread, can people in tech sales tell me how do you get into that kinda job? I have had a late start in my career and right now looks like the only way to have that kinda portfolio is by having a high paying job, which will allow you to have a substantial savings each year.

I'd be curious as well. I'm a software engineer, and my salary seems to have leveled off recently with no path to promotion.

"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle